H+H signs agreement to acquire HeidelbergCement’s German and Swiss calcium silicate unit business
15 December 2017 - 9:02AM
H+H signs agreement to acquire HeidelbergCement’s German and Swiss
calcium silicate unit business
With the acquisition, H+H will increase revenue by DKK 500
million and EBITDA by DKK 100 million and become the second largest
European producer of calcium silicate units (CSU), focusing on the
fast-growing high-rise segment. The strategic acquisition has an
excellent geographic fit with H+H’s present business and will
supplement H+H’s existing product offering.
Today, H+H International A/S and its subsidiary H+H Deutschland
GmbH signed an agreement with HeidelbergCement AG and two other
HeidelbergCement Group companies to acquire the HeidelbergCement
Group’s German and Swiss CSU business (HDKS).
Transaction overview
- The transaction implies an enterprise value of DKK 818
million
- The purchase price will be settled in cash at closing
- Long-term supply agreement of sand in place
- Danske Bank A/S has committed to finance the transaction
- During the next 12 months, H+H will evaluate different funding
sources to maintain a prudent capital structure
- The transaction does not require antitrust approvals; minor
regulatory approvals to be obtained in near future
- Closing is expected in the first quarter of 2018
Quote:“This is a truly transformational acquisition” says CEO
Michael T Andersen. “It will strengthen our presence in Germany,
expand our product offering and supplement our newly acquired
calcium silicate unit business in Poland. This will also create a
more balanced geographic footprint and create a platform for
further market consolidation.”
Strategic rationale
Today, H+H holds a strong position within aircrete in the
Northern European region, especially in the UK and Polish markets.
By acquiring the Polish CSU producer Grupa Silikaty (awaiting
antitrust approval), H+H took the first step towards expanding its
product portfolio within the fast-growing high-rise segment.
With the acquisition of HDKS, H+H will accomplish several
important strategic targets:
- Create a more balanced geographical footprint
- Expand its product offering, mainly within residential
high-rise buildings, becoming the second largest European player
within CSU
- Create scale and critical mass in the German operations,
including expansion possibilities within both aircrete and CSU
operations
- Benefit from best practice sharing with the Polish operation of
Grupa Silikaty
- Harvest synergies from the integration in Germany, estimated
DKK 10 million when full integration is reached during the next
three years
About HDKS
HDKS consists of the following indirect subsidiaries of the
listed German company, HeidelbergCement AG: Heidelberger
Kalksandstein GmbH, KS-Quadro Bausysteme GmbH and Hunziker
Kalksandstein AG together with certain properties owned by
subsidiaries of HeidelbergCement AG. Estimated 2017 sales is DKK
500 million with an EBITDA of DKK 100 million. The business employs
approximately 200 full-time employees.
HDKS produces and sells CSU, which competes on the global
masonry market against e.g. aircrete, clay bricks and light-weight
concrete blocks. The business headquarter is in Southern Germany
and it operates eight factories; seven in Germany (four in the
South-West and three in the North-East) and one in Switzerland
bordering Germany. HDKS holds a solid second place among the German
CSU producers and is just above the volume size of Grupa Silikaty,
H+H’s recent Polish CSU acquisition.
Outlook for 2017
H+H reiterates its outlook for 2017, as stated in company
announcement No. 352 of 15 November 2017.
Transaction costs related to this transaction – including a
special transfer tax on real estate – are expected to be in the
region of DKK 25 million of which an estimated 30% is due in 2017
and will be treated as special items.
Conference call
In connection with this announcement, H+H will host a conference
call on 15 December 2017 at 10.00 CET. Presentation material will
be available at www.HplusH.com prior to the call.
CEO Michael T Andersen, CFO Ian L Perkins and Vice President for
Business Development and IR Bjarne Pedersen will present the
rationale, transaction details etc. of the acquisition.
Dial-in details for investors and analysts: +45 3527 0229,
conference ID: 501455
Kent
Arentoft
Michael T AndersenChairman of the Board of
Directors
CEO
For further information please contact Michael T
Andersen, CEO, or Bjarne Pedersen, Vice President, Business
Development & IR, on telephone +45 35 27 02 00.
Disclaimer
This announcement contains forward-looking statements. Such
statements are subject to risks and uncertainties, as various
factors, many of which are beyond the control of H+H International
A/S, may cause actual developments and results to differ materially
from the expectations expressed in this report.
H+H’s core activity is the manufacture and sale of autoclaved
aerated concrete or aircrete, with a revenue in 2016 of DKK 1.6
billion. The main product is blocks used for building new houses,
mainly in the low-rise segment. H+H has 13 aircrete factories in
Northern and Central Europe and Northwest Russia with a total
output of more than 3 million cubic metres of aircrete a year and
has a leading position in most of its markets. H+H has around 1,000
employees and is listed on Nasdaq Copenhagen.
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